RERA tightening loans without investors protection under

National | Written by : IANS| Updated: Sun, Apr 30, 2017, 10:28 AM


Kolkata, April 30: The Real Estate Regulation and Development Act (RERA), 2016 developers on sunday expressed worry that they may face difficulties to obtain credit for projects unless interest is protected under investors which will show effect from Monday.

The Confederation of Real Estate Developers Association of India (CREDAI) Bengal's President Nandu Belani elaborated lenders who funded projects usually ask for a certain percentage of receivables from every unit sold as repayment of loan. According to the act, a separate account will be used to deposit 70 per cent of the money collected for the project's construction and a separate account will be used to deposit and developers can draw from it only for construction purposes.The consulting firm Knight Frank's Chief Economist Samantak Das however said the act is meant for ensuring a level playing field for buyers so that they can take an informed decision while buying homes based on the available data and at the same time buyers' interest can be protected.

Investors always look for security before lending. There will be no problem if projects, registered in the regulatory authority, come out well. But there may be cases in which projects being funded by lenders somehow do not take off. In these cases, buyers will get refund from the separate account but lenders' advances turn bad," Emami Infrastructure's whole-time Director and CFO Girja Choudhary explained.